Supreme Court Weighs Whether To Limit Data Mining

At the U.S. Supreme Court on Tuesday, the justices for the first time will hear a case that tests what limits the government may put on data mining for commercial purposes. At issue is whether a state may bar the buying, selling and profiling of doctors' prescription records for use by pharmaceutical sales representatives.

Under federal and state law, pharmacies are required to keep records of every doctor's prescription, and while patient privacy is protected by federal law, doctor privacy is not.

Pharmacies can and do sell prescription information to data miners, who in turn aggregate it to show each doctor's name, the number of prescriptions written for each drug, prescriptions for similar drugs, and changes from one drug to another. The data miners then sell that information to drug manufacturers, to help sales representatives target doctors for sales pitches and try to get them to prescribe, for example, a brand name instead of a generic.

Until relatively recently, doctors did not know this was happening, according to Paula Duncan, president of the Vermont Medical Society. She says Vermont doctors were "very surprised" to learn that their prescription patterns could be so easily identified and sold.

So the medical society went to the state Legislature to "[make] sure that the privacy of the physician-patient relationship was really kept intact and free from other influences."

The state enacted a law that bars the selling and buying of prescription information without a doctor's consent. Under the law, doctors must fill out a form as part of their license renewal application that indicates whether they agree to have their prescription information sold for marketing purposes.

Data miners, backed by the pharmaceutical industry, immediately challenged the law in court, and won. The state then appealed to the Supreme Court, which hears arguments in the case Tuesday.

The Two Arguments

The data miners will tell the justices that the law unconstitutionally impedes free speech. "Vermont can't try and keep information out of the hands of doctors and nurse practitioners that's truthful and incredibly important about the health and safety of prescription drugs," says the industry's lawyer, Thomas Goldstein.

But Vermont counters that its law stops no one from speaking. Assistant Attorney General Bridget Asay will tell the justices that the state's law "doesn't do anything to stop pharmaceutical manufacturers from sending their salespeople to doctors" or from telling doctors "why they think their products are better, or are more effective, or worth the money."

This isn't a case about the right of free speech, she says. It's about "whether doctors have a right to control the use of their prescribing information against an unwanted marketing practice."

Goldstein counters that there is more at stake here because the state allows insurers and its own Medicaid managers to have access to prescribing information, while barring the same information from data miners and pharmaceutical manufacturers. The Constitution, he maintains, does not allow the state to "play favorites in this way."

"Vermont can and does encourage doctors to use generics," Goldstein says. "But what it can't do is at the same time tie the hands of the people who want to convey the opposite message."

But Asay replies that insurers and state Medicaid managers do not buy their information from pharmacies and data vendors. She says they get the information directly from doctors and patients as part of managing benefits.

The pharmaceutical industry, with an army of thousands of salespeople, spends at least $8 billion each year marketing drugs in person to doctors. It is a system that has proven highly resistant to change, despite criticism from experts such as Philip Pizzo, dean of Stanford University School of Medicine.

"Given today's information technology, there is no reason why information about new drugs, side effects or drugs in general needs to come from marketing reps," Pizzo said during a 2006 discussion of medical ethics at the Cleveland Clinic. And Roy Vagelos, a former CEO of Merck, said his attempts to use technology for marketing to doctors had failed, largely because of opposition from the very sales reps who make their living selling pharmaceuticals to doctors.

Larger Implications

Tuesday's case, however, extends far beyond the pharmaceutical industry, with larger implications for the data mining industry and for consumers in general.

Lawyer Goldstein describes the issue from the industry perspective, arguing that "if Vermont is right that the collection and manipulation of data isn't free speech, then the government can regulate it however it wants." He says that even data mining for nonmarketing purposes, such as news reporting and analysis, could be in danger.

But Vermont's Asay takes the opposite view. If the Supreme Court says a pharmacy has a First Amendment right to sell the information it collects from its patients and doctors, she says, "that ruling would extend ... to other businesses that also collect personal information from consumers, like banks and other financial institutions, other health care organizations, tracking on the Internet, and credit card purchasing information."

Indeed, there are countless companies that collect and sell consumers' personal information, and Tuesday's Supreme Court case is the first to test the limits of that practice.

PAULA DUNCAN: People were quite surprised, because they had just no idea. Because, you know, from the physician's standpoint, we always think everything is so sacred in terms of privacy.

TOTENBERG: Paula Duncan, the president of the Vermont Medical Society, says that when her organization learned about prescription data mining, it went to the state legislature for help.

DUNCAN: The major thrust here was trying to make sure that the privacy of the physician-patient relationship was really kept intact and free from other influences.

TOTENBERG: The data miners, backed by the pharmaceutical industry, contend the law unconstitutionally bars the dissemination of truthful information. Tom Goldstein represents the industry.

TOM GOLDSTEIN: Vermont can't try and keep information out of the hands of doctors and nurse practitioners that's truthful and incredibly important about the health and safety of prescription drugs.

BRIDGET ASAY: This bill doesn't do anything to stop pharmaceutical manufacturers from sending their salespeople to doctors, to telling them why their products they think are better or are more effective, are worth the money.

TOTENBERG: Vermont Assistant Attorney General Bridget Asay.

ASAY: What's at issue here is whether doctors have a right to control the use of their prescribing information against an unwanted marketing practice.

TOTENBERG: The industry's Goldstein counters that there is more at stake here, because he contends the state allows insurers and its own Medicaid managers to have access to prescribing information, while barring the same information from data miners and pharmaceutical manufacturers. The Constitution, he maintains, does not allow the state to play favorites that way.

GOLDSTEIN: Vermont can and does encourage doctors to use generics, brand names that are less expensive, maybe that they think are more effective. But what it can't do is, at the same time, tie the hands of the people who want to convey the opposite message and say: You know what? Ambien's actually better. Here's the reason.

TOTENBERG: But the state's lawyer, Bridget Asay, contends that insurers and state Medicaid managers don't buy their information from pharmacies and data vendors.

ASAY: They get that information right from doctors and patients as part of managing benefits.

TOTENBERG: The pharmaceutical industry, with an army of thousands of salespeople, spends at least $8 billion each year marketing drugs in person to doctors - this despite the fact that many experts like Stanford Medical School Dean Philip Pizzo say doctors don't need these sales calls anymore to learn about available medicines.

PHILIP PIZZO: In the world of information technology today, there is no reason why the source of information about new drugs or side effects or drugs in general need to come from marketing reps.

TOTENBERG: Today's case, however, has much larger implications for the data mining industry and for consumes. Tom Goldstein poses the issue from the industry perspective.

GOLDSTEIN: If Vermont is right that the collection and manipulation of data isn't free speech, then the government can regulate it however it wants.

TOTENBERG: Bridget Asay has a somewhat different spin. If the Supreme Court says a pharmacy has a First Amendment right to sell the information it collects from its patients and doctors...

ASAY: That ruling would extend, I think, to other businesses that also collect personal information from consumers, like banks and other financial institutions, tracking on the Internet and credit card-purchasing information.